December 3, 2013
BY MARK JAMISON
A couple of weeks ago I filed a motion with the Postal Regulatory Commission requesting access to the documents related to the Negotiated Service Agreement (NSA) on the program to deliver Amazon parcels on Sundays. As I write this, the PRC has not yet ruled on my request, but regardless of what happens, I hope a useful purpose will have been served. (There's more about the motion and the oppositions filed by the USPS and Amazon in this post.)
In making this request and writing about it, I hope to draw attention to the PRC cases that administer the competitive products list and review new NSAs. The Postal Accountability and Enhancement Act of 2006 has long been vilified as the major source of the Postal Service’s problems because it mandates $5.5 billion in annual payments for the prefunding of retiree health benefits, which has been the major cause of the losses reported by the Postal Service since 2007. I would suggest, however, that in the long term, the most damaging and dangerous part of the PAEA was the separation of the Postal Service’s activities into categories of market-dominant and competitive products.
For those who view the activities of the Postal Service as a public service and the postal network as part of our nation’s infrastructure, the language of the PAEA ought to be seen as troubling. Since the Postal Reorganization Act of 1971, there’s been a push to make the Postal Service more businesslike. For many, the term “businesslike” was intended simply to mean “efficient,” and there was no reason to question the virtue of efficiency, but there were others, including the leadership of the Postal Service and majorities in both parties in Congress, who took the language quite literally: The Postal Service was to become more of a business, with its behavior and incentives guided by a corporate mindset and perspective.
By viewing the service of delivering mail in terms of commercial products, the concept of the postal network as a form of open-access infrastructure was replaced by the idea of the Postal Service as corporate entity. The goal of managing and regulating the Postal Service shifted away from maintaining an efficient, cost-effective means of delivering an essential public service. The goal instead became restraining the conduct of a corporate monopoly.
Dividing postal products into market-dominant and competitive products further undermined the notion of the Postal Service as a provider of a public service. The division codified the view that some aspects of the Postal Service were extraneous to its public service mission and existed solely to compete with private sector offerings and presumably earn profits.
The problem with this view is that it quickly undermines any rationale for public service, replacing it with a full-speed-ahead approach towards turning our nation’s postal network into little more than a business proposition. Placed in a situation of serving two distinct and often opposing missions, policy makers and postal leadership have not surprisingly taken the easier road of defining the Postal Service as a profit-seeking enterprise.
A public service mission is difficult to fulfill. It requires constant evaluation, assessment, and institutional self-examination. Defining efficiency and success in a public service is much more complex than the more clear-cut metric of profitability in a business enterprise. A business can content itself with measuring success in dollars and cents, whereas the success of a public service is measured, at least in part, by intangibles like enhancing social value, maintaining community identity, and promoting universal service and access. These measures may be less concrete than profit, but they are certainly no less valuable.
We don’t ask our national parks to make money, and we don’t ask them to cover their costs by generating sufficient revenues in access fees. NASA and the NIH aren’t required to turn a profit because we recognize that basic research and the intellectual property it generates return tremendous value to our society. We don’t make our interstate highways toll roads nor do we limit them to only the highest populated areas. We realize that a transportation network offers opportunity that results in enhanced economic potential. And we don’t ask our military to break even. We consider defense of the Republic to be an essential public service.
We understand that these infrastructures and the services they provide are useful and productive. We don't expect them to be accountable in terms of profits and losses. We are wise enough to recognize that the benefits they provide cannot be calculated in the terms of a ledger sheet.
For some reason, however, many people believe the case of the Postal Service is different. Because paying postage fees for using the postal system is taken for granted, we have been led to believe that the entire value of our postal infrastructure is limited to the fees it generates. It clearly isn’t.
November 26, 2013
INTRODUCTION BY MARK JAMISON
For the past couple of weeks, the media have focused, almost obsessively, on the assassination of President John F. Kennedy, November 22 being the fiftieth anniversary of his death. I found myself wandering through some of JFK’s speeches and came across his commencement address at Yale University, delivered on June 11, 1962.
In this speech President Kennedy focuses on three questions — the size and shape of government’s responsibilities, public fiscal policy, and confidence in America. In all three areas, he says, “there is a danger that illusion may prevent effective action,” and his speech seeks to distinguish myth from reality and to “separate false problems from real ones.”
As I read the president’s words, I saw obvious parallels to the situation we find ourselves in today, particularly with respect to our approach to solving the problems of the Postal Service. While we choke a great national institution and an essential piece of our infrastructure, trying to force it into a mold it can never fit, we also eliminate hundreds of thousands of jobs, dismiss opportunity for future generations, and, worst of all, abandon the basic principles of our country’s founding.
The populist demagoguery of the Tea Party enflames Republicans to rhetoric that portrays government as bad. The result is predictable — bad government. Most Democrats are not much better, seeing government as the handmaiden of corporate America, forgetting that this country is more, much more than a series of stakeholders and special interests. We may be a melting pot of people and interests, but the whole has always been greater than the sum of those parts — something we seem to have forgotten.
In this speech President Kennedy talks about the myths that obscure reality. He questions the myth of big government and, by implication, the related myth that government ought to be more like business. He takes on myths of budget and fiscal deficits, the very ones that drive our thinking today, like the myth that taxpayers would rather see government operations privatized than pay for them, which is used to excuse the expropriation of public services and goods. He also speaks passionately of employment, full employment, as the engine that drives our economy.
The problems of the 1960’s are not the problems of today. In many ways, we have regressed to 1929, or perhaps to an even earlier time, the Gilded Age of the 1890s. Though our problems may be different today than the one’s President Kennedy discusses, they are not all that dissimilar. I have argued in many posts here on Save the Post Office that the problems facing the Postal Service and the proposals to solve them are a reflection of our greater economic problems and the way we have approached them. Millions are without employment, yet we cut hundreds of thousands of jobs. Our infrastructure crumbles, and our approach is to privatize it. Our safety net is shredded leaving millions more vulnerable, and our answer is demand even further cuts. Wages and opportunity are stagnant, yet an increasingly small number of us are doing quite well, demanding and taking an ever-greater slice of the economic pie.
President Kennedy ends his speech with a call to arms. I don’t believe it is the same cynical and nihilistic call that drives much of our political discourse today — the call of “I’ve got mine so cut everything and everyone that is not of direct benefit to me." In his inaugural address President Kennedy asked us to remember country and community. It is past time that we began rebuilding this country, our economy, our infrastructure, our confidence, and yes, our Postal Service, in ways that benefit the great mass of Americans and the communities they live in — that should be our call to arms.
We would do well to listen and reflect upon these words of President Kennedy. Here’s what he told the graduating class that June day. (Some introductory and miscellaneous remarks have been edited out. The full text can be found here, and an audio version of the speech can be found here.)
October 15, 2013
BY MARK JAMISON
The postal monopolies have been the subject of much discussion recently. In last month’s Senate hearings, Senator Tom Coburn of Oklahoma offered his view that the monopolies weren’t worth much anymore so the Postal Service doesn’t need much regulatory control. In the same hearing, Ruth Goldway, Chairman of the PRC, expressed concern that eliminating or modifying the price cap regimen for setting rates would be a serious concern in view of the Postal Service’s continued monopoly position with respect to market dominant products. In her confirmation hearing for reappointment as a PRC Commissioner, Nanci Langley added her concerns about the ability of the Postal Service to abuse its monopoly powers.
The media has been full of comments and press releases from various mailers groups and lobbying organizations regarding the exigent price increase requested by the Postal Service. Most of these groups express dismay at the thought of a price increase but also at the idea that the Postal Service would abuse its market dominant position if allowed to raise rates outside of the CPI price cap.
The road to perdition
One of the loudest voices has been that of Gene Del Polito, president of the lobbying group PostCom. In a recent commentary, Mr. Del Polito takes Senator Coburn to task for his remarks about the postal monopoly and then goes on to chide every member of Congress who deviates from the Gospel According to Gene.
“One could say there are two roads to postal reform,” writes Mr. Del Polito. “One is a narrow and winding; the other is a road that’s broad, well-paved, and straight. One leads to postal nirvana; the other to postal perdition.”
Mr. Del Polito’s idea of postal nirvana is one in which rates are kept low for the benefit of mailers — at the expense of infrastructure, postal workers, communities, and consumers. Giving the Postal Service the authority to set prices without outside regulation, on the other hand, would take us down the road to perdition and expose us to all the evils associated with an unregulated monopoly.
Mr. Del Polito tends to get abrasive in his criticisms of those who disagree with him, using terms like “knotheads” and “socialists” to describe people (like me) who view the postal network as a piece of national infrastructure that must be protected for the sake of the many rather than the few. Ironically it’s Mr. Del Polito’s sense of entitlement — his view that a few large mailers should be provided with artificially low rates and unnecessary discounts — that smacks of what economist Joseph E. Stiglitz describes as “America’s socialism for the rich.”
September 27, 2013
BY MARK JAMISON
The Postal Regulatory Commission recently dismissed two appeals on post office closings — Freistatt, Missouri, and the Franklin Station in Somerset County, New Jersey. Both appeals were dismissed because they were filed late – in both cases, less than a week after the deadline.
There’s no question that the PRC has rules of procedure that it must abide by, but it frequently grants extensions to deadlines, more often than not to the Postal Service. The PRC’s rules of procedures and the regulations that govern post office closings can be tough to sort through, especially for the average citizen who might not be familiar with bureaucratic and legal language.
For its part the Postal Service doesn’t make it easy on folks who wish to appeal the closing of a post office. If the post office is a station or branch, the final determination doesn’t even mention that the community has a right to appeal to the PRC. That’s because the Postal Service believes that only independent post offices are permitted to appeal, even though the Commission regularly hears appeal on stations and branches.
There are other problems with the discontinuance notices. In Freistatt, because the post office had been suspended, two discontinuance notices were posted in post offices several miles away, and a third was taped to the back of a cluster box unit that replaced the post office. In some cases the Postal Service has failed to produce a complete administrative record documenting the discontinuance process; in a few cases, there was more than one version of the discontinuance notice, and they contained conflicting information.
The appeals process could be made fairer for communities if there were a few simple changes in the discontinuance procedures that the Postal Service follows and in the process that the PRC uses to review appeals.